Gold climbed more than 1% on Monday as mounting expectations of a potential diplomatic breakthrough between the United States and Iran pushed oil prices and the dollar lower, easing fears that the Middle East conflict could lock the Federal Reserve into a prolonged period of high interest rates.

Spot gold rose 1.1% to $4,559.69 an ounce, while US gold futures gained 0.9% to $4,561.30, as investors rotated back into bullion after weeks of volatility tied to the Iran war and surging energy markets.

The rally came as financial markets responded positively to signs of renewed diplomacy over the conflict that has destabilized global energy flows for nearly three months. Oil prices slipped below $100 per barrel to their lowest levels in two weeks after President Donald Trump said Washington and Tehran had largely negotiated a memorandum of understanding that could reopen the Strait of Hormuz, one of the world’s most critical oil shipping corridors.

Although both Washington and Tehran later downplayed the prospects of an immediate agreement, investors interpreted the developments as reducing the risk of a prolonged supply shock in global energy markets.

The shift in sentiment reverberated across asset classes. Equities rallied, the dollar weakened toward a one-week low, and Treasury market expectations for future Federal Reserve policy softened as traders reassessed inflation risks linked to the conflict.

“Financial assets are strongly influenced by oil prices at present, and gold prices are not an exception,” said Giovanni Staunovo, an analyst at UBS.

“Lower oil prices lift gold, in anticipation that it impacts the monetary policy of the Federal Reserve,” Staunovo said, adding that the trend could continue in the near term.

The rebound in bullion marks a notable shift after gold lost roughly 14% since the Iran war erupted in late February. During that period, soaring crude prices fueled fears of entrenched inflation, pushing bond yields higher and strengthening expectations that US interest rates would remain elevated for longer.

Energy-driven inflation has become one of the defining themes of global markets in recent months. The war disrupted shipping through the Strait of Hormuz, a chokepoint through which roughly a fifth of the world’s oil supply passes, triggering spikes in crude, fuel, and transport costs worldwide.

That pressure complicated the Federal Reserve’s inflation battle just as markets had begun anticipating rate cuts earlier this year. Traders now see a roughly 40% probability of a 25-basis-point Fed rate hike in December, a sharp reversal from pre-war expectations that policymakers would deliver two rate cuts in 2026.

The policy uncertainty has intensified following the swearing-in of Kevin Warsh as the new Federal Reserve chair on Friday. Warsh takes office at a delicate moment for the US economy, with higher gasoline prices weighing on consumer confidence while geopolitical risks continue to cloud the inflation outlook.

Analysts said Monday’s rally in gold reflected a recalibration of those concerns rather than a complete unwinding of safe-haven demand.

Markets remain cautious because negotiations between the US and Iran continue to face significant obstacles, including disagreements over Tehran’s nuclear programme, regional security arrangements, and guarantees surrounding shipping routes in the Gulf.

Trump warned over the weekend that Iran “better get moving, FAST, or there won’t be anything left of them,” underscoring how fragile the diplomatic track remains even as markets welcome signs of de-escalation.

Precious metals broadly strengthened alongside gold. Spot silver surged 3.1% to $77.86 an ounce, platinum gained 2.1% to $1,962.93, while palladium advanced 2.8% to $1,386.47. The sharp moves across metals markets also reflected improving risk appetite and expectations that easing energy pressures could stabilize industrial demand conditions globally.

Investors are now watching whether diplomatic momentum translates into tangible progress on reopening the Strait of Hormuz and reducing pressure on global supply chains. Any sustained decline in oil prices could ease inflation expectations further and reshape the outlook for both the Federal Reserve and broader financial markets heading into the second half of the year.

Nvidia Chief Executive Jensen Huang has criticized corporate leaders who attribute layoffs to artificial intelligence, arguing that many executives are using AI as a convenient justification for broader cost-cutting and restructuring decisions rather than describing the technology’s actual impact on the workforce.

Speaking in an interview with Singapore broadcaster CNA on Monday, Huang dismissed the growing corporate narrative linking job cuts directly to AI adoption as “lazy,” saying the timeline simply does not support many of the claims being made by executives.

“I think the narrative that connects AI to job loss for many of the CEOs that are doing it, it is just too lazy,” Huang said.

The Nvidia chief argued that generative AI tools only recently became practical and productive enough for widespread enterprise deployment, making it implausible for companies to claim that earlier rounds of layoffs were primarily driven by AI disruption.

“AI has just arrived. How is it possible they’re already losing jobs?” Huang asked.

His remarks come as artificial intelligence increasingly dominates corporate strategy discussions across industries ranging from finance and media to software, manufacturing, and consulting. Since the launch of OpenAI’s ChatGPT in late 2022, companies have rushed to integrate generative AI tools into customer service, coding, marketing, analytics, and administrative workflows.

At the same time, fears of automation-driven job displacement have intensified globally, particularly in white-collar professions once considered relatively insulated from technological disruption. Major technology firms, including Microsoft, Google, Meta Platforms, and Amazon, have collectively eliminated tens of thousands of jobs over the past two years while simultaneously increasing investments in AI infrastructure and software development.

That overlap has fueled public suspicion that companies are using AI to replace workers. But Huang suggested many layoffs were tied more to post-pandemic overexpansion, efficiency drives, and slowing growth rather than immediate AI substitution.

“How is it possible that AI became productive and useful only six months ago, and they were somehow laying people off two years ago because of AI?” Huang said.

He accused some executives of invoking AI simply “to sound smart,” adding: “I really hate that.”

The comments are remarkable because Huang sits at the center of the AI boom. Nvidia’s graphics processing units, or GPUs, power much of the infrastructure underpinning modern artificial intelligence systems, making the company one of the biggest beneficiaries of the generative AI surge.

Nvidia became the world’s most valuable publicly traded company as demand for AI chips exploded among cloud providers, governments, and enterprises racing to build large-scale AI systems. Yet Huang has consistently framed AI as a productivity-enhancing technology rather than purely a labor replacement tool. He argues that AI will create new industries, accelerate scientific discovery, and expand economic output, even as it reshapes some job categories.

His latest comments appear aimed at countering growing public anxiety that AI adoption will inevitably trigger mass unemployment.

“I think we’re scaring people and that’s irresponsible,” Huang said.

Instead, he called for what he described as a “balanced narrative” around AI, one that acknowledges risks while also emphasizing the technology’s broader economic and societal potential.

Huang said governments and companies should focus on building safeguards, security standards, and industrial policies that allow AI to develop safely while ensuring workers can adapt to technological changes.

“Tell a story that’s optimistic so that people want to be part of it,” he added.

The debate over AI and employment has become increasingly politically sensitive as governments worldwide assess how rapidly advancing automation could reshape labor markets.

Economists remain divided over the long-term consequences. Some analysts argue that generative AI could substantially reduce demand for certain white-collar tasks involving writing, coding, customer support, and data processing. Others believe AI will mainly augment human workers by automating repetitive functions while creating new categories of higher-skilled employment.

Goldman Sachs estimated last year that generative AI could affect hundreds of millions of jobs globally, though the bank also projected large productivity gains and potential economic expansion from the technology.

Huang’s remarks also come as Nvidia attempts to broaden its influence beyond hardware into AI infrastructure, software, and enterprise computing platforms. Last week, the company projected a $200 billion market opportunity for CPUs tied to the rise of so-called agentic AI systems capable of autonomous reasoning and decision-making.

Trump-Xi Summit – Making the Trip

Beyond AI, Huang also discussed his recent participation in President Donald Trump’s trip to Beijing, offering a rare behind-the-scenes account of how he joined the delegation.

According to Huang, Trump personally called him on the morning of departure and urged him to join the trip after mistakenly assuming the Nvidia CEO was already in Washington.

Huang said he was on the U.S. West Coast when Trump instructed him to meet Air Force One in Alaska.

“He called me in the morning. He didn’t realize I wasn’t going and he insisted that I get on the plane and go,” Huang said.

Huang added that he hurriedly packed, flew to Alaska, and joined a broader delegation of American executives traveling to China alongside Trump.

“We were there to really represent the United States and support the president,” he said.

The trip came amid continued tensions between Washington and Beijing over trade, semiconductors, and AI leadership. Nvidia remains deeply exposed to the geopolitical standoff because China continues to represent one of the world’s largest potential AI markets even as U.S. export controls increasingly limit advanced chip sales to Chinese customers.

Indian equity markets opened the week on a strong note on Monday, with benchmark indices posting solid gains as global crude oil prices fell below the psychologically key $100-per-barrel level for the first time in more than two weeks.

The rally was fueled by optimism surrounding potential progress in U.S.-Iran negotiations to end the conflict and restore normal shipping through the Strait of Hormuz.

The Nifty 50 rose 0.94% to close at 23,941.85, while the BSE Sensex advanced 1.02% to 76,194.32. The advance was broad-based, with all 16 major sectoral indices closing in the green. Broader market segments also participated, as the Nifty Small-cap 100 gained 1.2% and the Mid-cap 100 rose 0.7%.

Brent crude dropped 5.6% to $97.8 per barrel, reflecting growing investor confidence after U.S. President Donald Trump indicated that Washington and Iran had “largely negotiated” a memorandum of understanding aimed at ending the war and reopening the critical waterway, which normally carries around one-fifth of global oil and LNG shipments.

Hitesh Tailor, research analyst at Choice Equity Broking, commented on the improved sentiment.

“Easing concerns around Middle East tensions have improved the overall risk appetite among investors, and this may continue to support bullish momentum in the near term,” he said.

As one of the world’s largest crude oil importers, India stands to benefit substantially from lower energy prices. The decline helps ease pressure on the current account deficit, supports the rupee, and reduces input costs across transportation, logistics, manufacturing, agriculture, and aviation sectors. This is particularly timely after the government recently raised import duties on gold and silver while implementing multiple retail fuel price hikes this month to help state-owned oil marketing companies recover losses.

Oil marketing companies led the sectoral gains. BPCL, HPCL, and Indian Oil Corp jumped between 4% and 4.5%, as lower crude costs are expected to improve their marketing margins and profitability in the coming quarters.

Banking heavyweights also contributed meaningfully to the rally, with HDFC Bank gaining 2% and ICICI Bank rising 1.3%. Improved liquidity conditions, lower input costs for the broader economy, and expectations of sustained credit growth supported financial stocks.

Among individual performers, Eicher Motors surged 5.7% after posting better-than-expected quarterly results, driven by robust demand for Royal Enfield motorcycles and commercial vehicles. The result highlighted resilience in certain discretionary consumption segments despite broader economic headwinds.

Despite the strong session, analysts flagged potential resistance for the Nifty around the psychologically important 24,000 level. Markets have experienced several false rallies since the Iran war began, and any delays or breakdowns in peace talks could quickly reverse sentiment.

Global investors appeared to discount President Trump’s more cautious Sunday comments, which tempered expectations for an immediate breakthrough.

The broader market mood remains cautiously optimistic. Lower oil prices are expected to help moderate inflation and provide the Reserve Bank of India with more flexibility to support growth. However, analysts caution that a prolonged negotiation process or renewed escalation in the Middle East would keep volatility elevated and could pressure import-dependent sectors.

This rally is expected to provide broader relief for the Indian economy. Lower energy costs provide breathing room after months of pressure on the rupee and inflation from the conflict. It also supports consumption and corporate margins, particularly for sectors heavily exposed to fuel and logistics costs.

However, the market’s reaction also reflects India’s structural vulnerabilities as a major energy importer. While sustained lower oil prices would be a significant tailwind for GDP growth, fiscal balances, and foreign exchange reserves, any reversal in oil prices would quickly reignite concerns over imported inflation and trade imbalances.

For now, the combination of easing geopolitical fears and positive global risk appetite has given Indian equities a strong start to the week. While today’s gains provide relief, sustained momentum will depend on concrete progress toward peace in the Gulf and the RBI’s ability to balance growth support with inflation management in the coming months.